-Shangri-La v. Developers Group of Companies, Inc.

-Nature:
Petition for review under Rule 45 of the Rules of Court
o Petitioners
Shangri-La
International
Hotel
Management, Ltd. (SLIHM) assail to set aside Court of
Appeals (CA) decision on 15 May 2003 and resolution
on 15 September 2003
-Facts:
On 18 October 1982, Developers Group of Companies, Inc.
(DGCI) filed with the Bureau of Patents, Trademarks, and
Technology Transfer (BPTTT) for registration covering the
Shangri-La mark and S logo
On 31 May 1983, BPTTT issued in favor of DGCI, Registration
No. 31904
DGCI has used the S logo since then
But as far back as 1962, the Kuok Group of Companies has
adopted the name Shangri-La in all Shangri-La hotels and
hotel-related establishments worldwide (SLIHM)
In February 1975, William Lee, a Singaporean design artist
commissioned to design the logo of Shangri-La hotels,
launched the stylized S logo
SLIHM has used the name Shangri-La and the S logo
since then
Shangri-La Hotel and Resort, Inc. was incorporated in the RP
beginning 1987 when the Kuok Group put up two hotels in
Mandaluyong and Makati
On 21 June 1988, SLIHM filed with the BPTTT a petition,
praying for the cancellation of the Registration No. 31904
and for the registration of the mark and logo in their own
name
DGCI filed a complaint for Infringement and Damages with
the RTC of Quezon City against SLIHM because they have
been using the mark and the logo for the last eight years
SLIHM pointed to the Paris Convention for the
Protection of Industrial Property and further claimed
that they have used the mark and logo since 1975
On 8 March 1996, RTC ruled in favor of DGCI
Therefrom, SLIHM went on appeal to the CA, but the
affirmed the lower courts decision with the modification of
deleting the award of attorneys fees
o SLIHM moved a motion for reconsideration, but was
also denied

-Issue:
What constitutes trademark ownership?
-Decision:
Petition is granted and the assailed decision and resolution
of the CA is set aside
o SC ruled in favor of SLIHM
-Ratio
RA No. 166 (law in force at the time of DGCIs application)
o The root of ownership of a trademark is actual
use in commerce
o Section 2 of RA No. 166 requires that before a
trademark can be registered, it must have been
actually used in commerce and service for not less
than two months in the Philippines prior to the filing
of an application for its registration
Moreover, registration does not confer upon the registrant
an absolute right to the registered mark
o The certificate of registration is merely a prima facie
proof that the registrant is the owner of the
registered mark or trade name
o Evidence of prior and continuous use of the mark or
trade name by another can overcome the
presumptive ownership of the registrant and may
very well entitle the former to be declared owner in
an appropriate case
In other words, registration is not a mode of acquiring
ownership
o The actual use in commerce or business is a prerequisite to the acquisition of the right of ownership

In his testimony, Ramon Synhunliong, stated that the

alleged jeepney signboard artist commissioned to create the
mark and logo submitted his design only in December 1982
o That was two-and-a-half months after the filing of the
respondents trademark application
o Ramon Synhunliong has been a guest at SLIHMs
hotel before causing the registration of the
trademark, which gave rise to the allegation that he
must have copied the idea there

Section 2 of RA No. 166 provides for what is registerable,

containing the clause actually in use in commerce in
services not less than two months in the Philippines
o But Section 2-A sets out how ownership is acquired
o Under Section 2-A it states:
The actual use in commerce is the test of
ownership
The mark must not have been so appropriated
by another
Whether or not the actual use of the
trademark is in the Philippines
DGCI did not fulfill the requirements of ownership under
Section 2-A
International Law
o The Paris Convention mandates that protection
should be afforded to internationally known marks as
signatory to the Paris Convention, without regard as
to whether the foreign corporation is registered,
licensed or doing business in the Philippines
o The said convention runs afoul to Republic Act No.
166, which requires the actual use in commerce in
the Philippines of the subject mark or devise
o The conflict was settled by the Supreme Court:
o "Following universal acquiescence and comity, our
municipal law on trademarks regarding the
requirement of actual use in the Philippines
must subordinate an international agreement
inasmuch as the apparent clash is being decided by a
municipal tribunal (Mortensen vs. Peters, Great
Britain, High Court of Judiciary of Scotland, 1906, 8
Sessions 93; Paras, International Law and World
Organization, 1971 Ed., p. 20)
o Withal, the fact that international law has been made
part of the law of the land does not by any means
imply the primacy of international law over
national law in the municipal sphere
o Under the doctrine of incorporation as applied in
most countries, rules of international law are given a
standing equal, not superior, to national legislative
enactments (Salonga and Yap, Public International
Law, Fourth ed., 1974, p. 16)

CASE DIGEST: COMPAIA GENERAL DE TABACOS DE

FILIPINAS vs. ALHAMBRA CIGAR AND CIGARETTE
MANUFACTURING CO.
FACTS:
It is admitted that plaintiffs trade name as
evidenced by the certificate issued under the Spanish
regime, consists solely of the words La Flor de la Isabela.
Plaintiff does not claim that the word Isabela has been
registered by it as a trade name or that it has a title from
any source conferring on it the exclusive right to use that
word.
Defendant began the manufacture of cigarettes,
offering them to the public in packages on the front side of
each of which appeared the words Alhambra Isabelas.
Action is brought to enjoin the defendant from using
the word Isabelas.
The exclusive right to use this name, plaintiff claim
arises from two causes: First, the contraction of the phrase
La Flor de la Isabela into the word Isabela by popular
expression and use; and second, the use for more than
twenty years of the word Isabela.
Judgment was for plaintiff and defendant appealed.
ISSUE:
Whether defendants use of the word Alhambra
Isabela is an infringement to the use of trade name.
HELD:
The statute prohibits the registration of a trade name
when the trade name represents the geographical place of
production or origin of the products or goods to which the
trade name refers, or when it is merely the name, quality or
description of the merchandise with respect to which the
trade name is to be used. In such cases, therefore, no trade
name can exist.
The two claims of the plaintiff are identical; for, there
could have been no contraction brought about by popular
expression except after long lapse of time. The contraction

of the phrase in to the word would create no rights, there

being no registration, unless it resulted from long use.
The opinion of the plaintiff must fail. It shows that in
not a single instance in the history of the plaintiff
corporation, so far as is disclosed by the record, has a
package of its cigarettes gone into the market, either at
wholesale or retail with the word Isabela alone on the
package as a separate or distinct word or name.

Even admitting that the word Isabela may have

been appropriable by plaintiff as a trade name at the time it
began to use it, the evidence showing that it had been
exclusively appropriated by the plaintiff would have to be
very strong to establish the fact of appropriation and the
right to exclusive use. The law as it stands and has stood
since the Royal Decree of 1888 prohibits the use of a
geographical name as a trade name.
The judgment appealed from is reversed.